Apollo Technologies v. Centrosphere Indus.
| Decision Date | 25 September 1992 |
| Docket Number | Civ. A. No. 92-3712 (AJL). |
| Citation | 805 F. Supp. 1157 |
| Parties | APOLLO TECHNOLOGIES CORP., Plaintiff, v. CENTROSPHERE INDUSTRIAL CORP., Defendant. |
| Court | U.S. District Court — District of New Jersey |
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Martin H. Samson, Michael J. Silverberg, Phillips, Nizer, Benjamin, Krim & Ballon, New York City, David M. Hyman, Crummy, Del Deo, Dolan, Griffinger & Vecchione, Newark, N.J., for plaintiff.
Max Manshel, South Orange, N.J., Joseph B. Blaustein, Philip J. Karlin, A Professional Law Corp., Los Angeles, Cal., for defendant.
TABLE OF CONTENTS
Introduction ............................................................... 1166
Facts ...................................................................... 1167
A. The Parties and Other Significant Persons ........................... 1167
B. Apollo's Fuel Additives and Pollution Control Technology ............ 1168
C. The Bid for the NAPOCOR Trial Contract .............................. 1169
1. Apollo's Version of Events ....................................... 1169
2. Centrosphere's Version of Events ................................. 1171
D. The Agency Contracts ................................................ 1171
1. The First Agency Contract ........................................ 1172
2. The Second Agency Contract ....................................... 1172
E. Performance of the Trial Contract ................................... 1174
F. Completion of the Trial Contract .................................... 1175
G. Relationship Between Apollo and Centrosphere After 1 January 1992 ... 1176
H. Recent Dealings Between Apollo and NAPOCOR .......................... 1178
I. Recent Actions By Centrosphere ...................................... 1178
J. The Complaint ....................................................... 1179
Discussion.................................................................. 1181
A. Personal Jurisdiction ............................................... 1181
1. Jurisdiction Pursuant to the New Jersey Long Arm Rule ............ 1181
a. Minimum Contracts ............................................. 1182
b. Fair Play and Substantial Justice.............................. 1186
2. Adequacy of Service of Process ................................... 1187
B. Preliminary Injunction .............................................. 1190
1. Standard of Review ............................................... 1190
2. Likelihood of Success on the Merits .............................. 1191
a. Breach of Contract ............................................ 1192
b. Breach of Fiduciary Duty ...................................... 1195
(1) An Agent's Duties to its Principal ........................ 1195
(2) Termination of the Agency Relationship .................... 1196
(3) What Constitute Trade Secrets ............................. 1197
(4) Apollo's Claim that Centrosphere Breached Its Fiduciary
Duty By Purporting to Act as Apollo's Agent Following
Termination of the Second Agency Contract ................ 1198
(5) Apollo's Claim that Centrosphere Breached Its Fiduciary
Duty By Utilizing Confidential Information and Trade
Secrets in Competition with Apollo ....................... 1200
c. Unfair Competition ............................................ 1202
d. Intentional Interference With Prospective Contractual Relations
.............................................................. 1205
3. Irreparable Injury ............................................... 1206
a. The New Contract and the Interim Contract...................... 1208
b. The Potential Contracts ....................................... 1209
c. Trade Secrets ................................................. 1209
d. Injunctions Even Where Money Damages Appropriate .............. 1210
4. Balance of Hardships ............................................. 1211
5. Public Interest .................................................. 1211
Conclusion ................................................................. 1212
This is an action brought by plaintiff Apollo Technologies Corp. ("Apollo") against Centrosphere Industrial Corp. ("Centrosphere") arising out of an agency agreement in which Centrosphere agreed to market fuel additives and equipment on behalf of Apollo to the National Power Corporation ("NAPOCOR") of the Republic of the Philippines (the "Philippines"). Apollo alleges jurisdiction pursuant to 28 U.S.C. § 1332(a)(2).
On 2 September 1992, Apollo applied for a temporary restraining order ("TRO") and a preliminary injunction1 (the Preliminary Injunction") to restrain and enjoin Centrosphere2 from (1) competing with Apollo in the sale to NAPOCOR of fuel additives, equipment or other products or technologies competitive with those manufactured or sold by Apollo, (2) interfering in Apollo's sale of fuel additives to NAPOCOR, (3) utilizing or disclosing confidential information or trade secrets received from Apollo, including technologies and methods utilized in the selection, testing, operation and evaluation of Apollo's fuel additives and equipment and (4) acting or purporting to act as an agent of, or offering to sell fuel additives, equipment or other products made or sold by, Apollo. Moving Brief at 1; Becker Aff., ¶ 1.
Centrosphere submitted a cross motion to dismiss the action for insufficient service of process and for lack of personal jurisdiction over Centrosphere pursuant to Fed. R.Civ.P. 4.3 Opp. Brief at 1; WidjajA Aff., ¶ 1. In the alternative, should a preliminary injunction be granted to Apollo, Centrosphere cross-moves for a mutual preliminary injunction enjoining Apollo from: (1) refusing to provide Centrosphere with fuel additives, equipment and other products manufactured and sold by Apollo, for sale by Centrosphere to NAPOCOR, (2) interfering with Centrosphere in its relationship with NAPOCOR and (3) dealing directly with NAPOCOR, or dealing through organizations other than Centrosphere, for the purpose of providing fuel additives and related technologies to NAPOCOR. Opp. Brief at 1; Widjaja Aff., ¶ 1.
On 2 September 1992, Judge Alfred M. Wolin of this court denied Apollo's request for a TRO and ordered Centrosphere to show cause before this court on 18 September 1992 as to why an order granting the Preliminary Injunction should not issue. On 24 September 1992, oral argument was held4 to determine (1) whether personal jurisdiction exists over Centrosphere, (2) the adequacy of the process served on Centrosphere and (3) whether any preliminary injunction should issue. For the reasons set forth below, the Preliminary Injunction is denied; the cross-motion to dismiss or, if the Preliminary Injunction was granted, to make the Preliminary Injunction mutually enforceable, is also denied.
Apollo is a Delaware corporation with its principal place of business in New Jersey. Verified Complaint, filed 1 September 1992 (the "Complaint"), ¶ 1; Becker Aff., ¶ 8. Apollo is engaged in the sale of pollution control chemicals and related equipment with a focus in the sale of fuel additives and related equipment and technologies. Complaint, ¶ 1; Becker Aff., ¶ 8. It does not appear Apollo is licensed to do business in the Philippines. Widjaja Aff., ¶ 32, Ex. 10 ().
The founder and president of Apollo is Dr. Ira Kukin ("Kukin"). Kukin appears to be an expert in the pollution control field and an inventor of more than twenty-five products designed to control pollution and maximize energy efficiency through chemical means. Becker Aff., ¶ 9. The chief operating officer and vice president of Apollo is Donald G. Becker ("Becker"). Becker Aff., ¶ 1; Becker Reply Aff., ¶ 1. The vice president of engineering for Apollo is William Pepe ("Pepe"). Pepe Aff., ¶ 1.
Centrosphere is a corporation organized under the laws of the Philippines with its sole place of business in the Philippines. Widjaja Aff., ¶ 4; Complaint, ¶ 2; Opp. Brief at 1. Centrosphere is neither authorized to do business in either the United States or its territories nor does it maintain any offices in the United States. Widjaja Aff., ¶ 4; Opp. Brief at 1-2.
Only seven shareholders own stock in Centrosphere. Becker Aff., ¶ 37. These shareholders include Marian Mercado-DeLeon ("Mercado-DeLeon"), Fidel L. Bermudez ("Bermudez") and Ed Depano ("Depano"). Id.; Complaint, ¶ 4. Mercado-DeLeon is also the former president and general manager of Centrosphere. Widjaja Aff., ¶ 12; Becker Aff., ¶ 37.
The president of Centrosphere is Alexander Widjaja ("Widjaja"). Widjaja Aff., ¶¶ 1, 4; Complaint, ¶ 4; Becker Aff., ¶ 41. Widjaja became president of Centrosphere in April 1992. Widjaja Aff., ¶ 4. In addition to Centrosphere, since 1985 Widjaja has been an officer or shareholder in several Philippines corporations which have supplied goods and services to Centrosphere. Id., ¶ 5; Opp. Brief at 2. Two of these corporations are Joseph London ("London") and East/West Consolidated Services ("East/West"). Widjaja Aff., ¶ 5; Opp. Brief at 2.
Centrosphere was formed in April 1990 for the purpose of supplying fuel additives and related technology to entities in the Philippines. Widjaja Aff., ¶ 10; Opp. Brief at 2-3. Prior to April 1990, efforts had been made by Widjaja and East/West to establish interest in such products in the Philippines....
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